Latin American Economic Climate Index
The region's Economic Climate Index has been on a downward trend since the beginning of 2024. Between the 4th quarter of 2024 and the 1st quarter of 2025, this deterioration was driven by a further drop in the Current Situation Indicator (ISA), which reached 62.8 points - the lowest level since the 2nd quarter of 2023. The Expectations Indicator (IE), in turn, rose slightly to 77.8 points. Despite the rise, the EI remains at a historically depressed level.
Both the ISA and IE have been struggling to reach or sustain the neutrality level (100 points). The current and projected context of the Latin American economy has remained challenging over the last few quarters.
Latin American Economic Climate Index by country The construction of the ICE takes into account several Latin American countries, reflecting very different economic realities. This heterogeneity is expressed both in the level of the index and in its quarterly variations, offering a multifaceted portrait of the region.
In six of the ten countries evaluated, the ICE fell between the 4th quarter of 2024 and the 1st quarter of 2025. It should be noted that all the countries that were in positive territory at the end of 2024 (above 100 points) fell, including Paraguay, Argentina and Peru.
The impact of the fall in the Brazilian ICE on the aggregate indicator stands out, as does the improvement seen in Andean economies such as Colombia and Ecuador.
The ISA fell in five of the economies analyzed, with the negative highlights being Brazil (-40.4 points), Mexico (-21.3) and Paraguay (-25.1). Despite significant advances in Colombia (+30.0) and Chile (+16.7), the relative weight of Brazil and Mexico contributed decisively to the fall in the regional ISA, which reached 62.8 points in the 1st quarter of 2025 - 21.3 points less than in the previous quarter.
These setbacks reflect pessimistic reassessments of national scenarios. In Mexico, the deterioration stems from difficulties in trade relations with the United States. In Brazil, the confluence of fiscal and monetary uncertainties was decisive. In both cases, growth projections were revised significantly downwards, and Brazil went from positive to negative territory in the ISA.
The IE also fell in five countries, most notably Chile (-23.6 points) and Argentina (-17.9 points). On the other hand, there were strong advances in Ecuador (+37.3) and Mexico (+35.2), which led to a slight increase of 6.0 points in the regional EI, which reached 77.8 points at the start of 2025.
It's worth reiterating that the data was collected during the first quarter of 2025, before the escalation of the US-led trade war. The indicators are likely to undergo major revisions in the next edition, especially in the economies most exposed to international trade, such as Mexico, Colombia and Chile. These issues will be analyzed in greater depth in the 2nd quarter.
Changes in 2025 GDP growth projections
The estimates point to a slowdown in the region's growth in 2025, mainly reflecting the strong negative revisions in the projections for Mexico and Brazil, the two largest Latin American economies.
In addition to the numerical values, Table 2 shows the nature of the revisions: whether there has been a change in projections in the last three months and in which direction. In the regional aggregate, 72.3% of respondents revised their projections, 73.1% of which were downwards.
The cases of Mexico, Bolivia and Uruguay stand out, where all the changes had a negative bias. Brazil and Colombia also recorded a high proportion of downward revisions. Although Argentina had a majority of positive revisions, this was not enough to reverse the general perception of a slowdown.
Among those who raised their projections, 38% attributed this optimism to the expectation of new economic stimuli, especially in Brazil, where this was the only positive factor identified. The improvement in internal and external macroeconomic conditions was also mentioned, although less frequently.
More revealing is the analysis of the reasons behind the negative revisions. Worsening macroeconomic conditions, both internal and external, were the main factor cited. In the case of Chile, 100% of the negative revisions were attributed to the international scenario.
This pattern of responses is relevant given the worsening of the external environment at the start of the 2nd quarter of 2025, which could lead to further negative revisions in the next cycle of the Survey. Monitoring the unfolding of the trade war will be essential to understanding the impacts on the region's economies.
Special - An initial assessment of the impacts of the "Trump Agenda"
This edition of the Survey was carried out in a particularly sensitive context, marked by the inauguration of Donald Trump as president of the United States and profound changes in the conduct of American foreign policy, with impacts in the commercial, military, tariff and geopolitical spheres.
These changes have direct implications for Latin America, traditionally part of the US sphere of influence. However, the region is not a homogenous bloc, as this Survey has shown: each country has its own characteristics, resulting in different perceptions of the impacts of the new American agenda.
A wide variation in assessments is therefore expected, with some countries identifying opportunities and others anticipating risks. This heterogeneity is reflected in the responses to the survey on the effects of the "Trump Agenda": 84.3% of respondents foresee negative impacts (moderate or strongly negative), while only 14.4% expect moderate and positive effects. Only 1.4% do not consider the change of government in the US to be relevant.
The divergence in perceptions is significant. In Mexico, respondents unanimously predict negative impacts, with 83.3% considering them to be strongly negative. On the other hand, Ecuador, Brazil and Paraguay registered significant proportions of positive responses (over 30%), possibly associated with the expectation of access to new markets, as occurred during the first trade war (2017-2020), when agricultural exports from these countries to China increased significantly.
It is important to note that the data in this section was collected before the trade war intensified in the 2nd quarter of 2025, when the US increased import tariffs globally and adopted a more aggressive stance towards China. It is plausible that if the poll had been conducted later, the results would have been different. This hypothesis will be explored in future editions of the Survey.